07.25.06

Schumer Sends White House List Of Unanswered Questions That Must Be Answered About The Dubai Ports Deal

In Light of President First Learning About Dubai Port Deal After Its Speedy Approval by CFIUS, President and Congress Should Demand Answers to these Questions Before Deal is FinalizedSchumer: Why Did President Not Know About Deal Until After Approval? What Lobbying Took Place? Did Anyone Raise Objections? Why Did CFIUS Not Do Review Required by Law? Schumer Pushing Bipartisan Legislation When

U.S. Senator Chuck Schumer sent the following letter President Bush with a list of unanswered questions that must be answered about the Dubai Ports World acquisition of six major U.S. ports on the East Coast, including New York and New Jersey. This $6.8 billion deal is scheduled to be closed on March 2 and was approved by the Committee on Foreign Investment in the United States (CFIUS) last month, although the President wasnt aware of it until after the approval. Except for cargo screening functions performed by the Department of Homeland Security, the Port operator is responsible for securing cargo coming in and out of the port, the port facility itself, and the hiring of security personnel. In light of these critical functions being transferred from a private company based in Britain to a United Arab Emirates governmentowned company based in Dubai, today Schumer urged the President to answer these questions fully. Yesterday Schumer announced that he and Congressman Peter King, Chairman of the House Homeland Security Committee, were introducing emergency legislation to suspend the Dubai port deal.

Schumer sent the President the following letter with 15 questions below:

February 22, 2006

President George W. Bush The White House Washington DC

Dear President Bush,

Today your spokesperson stated that you were unaware that a foreign government was seeking to acquire shipping operations at major U.S. ports until after the Committee on Foreign Investment in the United States (CFIUS) had approved the deal. I trust you share my serious concerns about this deals potential impact on our national security, but there are still important questions that are still unanswered about the review process, the transaction and its impact on national security. Many of my colleagues on both sides of the aisle share my concerns and we all want answers to these important questions.

The CFIUSs evaluation of Dubai Ports Worlds takeover of Peninsular and Oriental Steamship Navigation lasted a short 23 days and was concluded without consultation of either the Congress or, apparently, your office. I believe that your Administration failed to give this transaction the throughout review it deserves and is required by law. As you know, the Committee on Foreign Investment in the United States (CFIUS) is required to conduct an additional 45day investigation in this case where a transaction would give a foreign government involvement in national security matters. That review was not done.

I am also concerned that throughout this process, the Administration has relied on the CFIUS security review and private assurances and mitigation agreements between DP World and the Department of Homeland Security as the foundation for approval of the takeover. However, CFIUS and your Administration have refused to reveal the criteria used during the review or the nature of the agreements on which this deal is based. I am concerned that this pattern of secrecy permeates your Administration and this case is no different. Members of Congress and the public need more information about how CFIUS reached the conclusion that this transaction does not, in any way, compromise national security.

In light of the growing concerns surrounding the takeover and skepticism about the thoroughness of the Administrations evaluation, I respectfully ask that you release details of the CFIUS investigation, explain what security criteria were evaluated, why CFIUS did not complete the 45 day investigation, and what, if any, outside influences advocated on behalf of DP World. Specifically, please provide answers to the following questions:


1. Why did this matter not come to your attention until the CFIUS review was completed?
2. Why did CFIUS decide to forgo the 45day investigation, despite a Congressional mandate to complete both the 30 day staff review and the 45 day investigation when the purchaser is owned or controlled by a foreign government?
3. Did any CFIUS member, or anyone else, recommend foregoing the 45day review?
4. Has CIFUS failed to complete the 45day investigation in any other case where a foreign government was involved in a transaction?
5. Did CFIUS review DP Worlds plan to prevent terrorist infiltration at their corporate headquarters or U.S. facilities?
6. Did CFIUS review past security assessments at DP Worlds seaport assets in the US and around the world?
7. Did CFIUS look in to whether there is any al Qaeda or suspected terrorist group investment in the company or the financing of the takeover? 8. Did CFIUS look in to whether any DP World employee or senior management official had any involvement is past nuclear weapon smuggling operations conducted out of the United Arab Emirates?
9. Did CFIUS consider the possibility of sudden regime change in the UAE or formulate a contingency plan if the Government of Dubai suddenly was taken over by radical antiAmerican leaders?
10. What assurances did CFIUS receive from the DP World that it would fully comply with U.S. port security regulations?
11. Did any of CFIUSs member agencies raise initial objections to the sale and what was done to mitigate those concerns?
12. According to the Department of Homeland Security, the Coast Guard is still inspecting DP World assets in the United States. Why did CFIUS not wait until that investigation was completed before approving the takeover?
13. Who advocated on behalf of the Government of Dubai for approval of the deal?
14. Did any members of your Administration, or former members of your Administration, advocate for approval of the deal?
15. What, if any, role did David Sanborne, a former DP World Executive and current nominee to head the Maritime Administration, play in the evaluation and approval of the takeover?

This matter is critical national security issue and many share my concern that CFIUS and your Administration have not completed the review necessary to thoroughly consider the security ramifications of turning over control of some of our most critical and vulnerable assets to a foreign government. I am also concerned that the continued secrecy surrounding the evaluation and approval of this transaction again represents your Administrations reluctance to be forthcoming with Congress and the public regarding pressing national security issues.

Sincerely, Charles E. Schumer

The SchumerKing emergency bill will:
" Require the President to place a stay on DP Worlds takeover of P&O ports.
" Require the Committee on Foreign Investment in the United States commence an immediate 45day investigation on the takeovers effects on national security. The bill also requires CFIUS to coordinate with other agencies, such as the Coast Guard, and to take in to consideration past security assessments of ports operated by DP World.
" Require the Secretaries of Homeland Security and the Treasury to prepare a full report and brief members of Congress on their findings.
" Upon receiving the report, Congress would have the authority to disapprove the sale within thirty days.



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